How Dish is embracing over-the-top

Dish Networks (NASDAQ:DISH) is working on expanding its potential customer base to virtually every TV owner in the US – at least that's what its latest announcements suggest. The satellite company is pushing the boundaries of its pay TV service across any and all physical networks to reach consumers wherever they my roam, The Diffusion Group (TDG) senior partner Colin Dixon said.

In the past week, Dish has announced it is working with Internet TV service provider Neulion to bring international programming to US residents via broadband and, at CES, it announced full integration of Slingbox into its digital video-recording product line. The Slingbox integration is part of Dish's TV Everywhere suite, although the satellite company stressed that it is not related to the cable companies' plans for authenticated online TV. (Dish actually has a trademark on the name TV Everywhere, which is why Time Warner uses it to describe an initiative, not a specific service.)

The Slingbox functionality can be integrated with Dish's existing DVRs through USB and will be in its to-be-released high-definition DVR. With the technology, users will be able to watch TV and DVR content through any broadband connection, including mobile phones and the PC. TDG has been forecasting this level of integration of Sling-like functionality into DVRs for the past two years. Dixon said that while it did take awhile to happen, today's consumer is no doubt better prepared to put such technology to work.

"Deep penetration of broadband service, widespread availability of wireless home networks, and increased awareness and use of 3G/4G networks make adoption of media place-shifting solutions much more likely," Dixon wrote in a report. He said that TDG supports Dish's basic premise that enhancing the portability of pay TV services will exploit growing consumer demand for control over how, when and where they view them.

UK satellite company BSkyB took a similar approach to the open Internet. It offers its pay TV service to any UK resident with a broadband connection. Consumers only need to pick a package from the Sky Web site provide a credit card, and they have instant access. By using this approach, BskyB opened up its service to customers across the UK, including those who might be unable to get service due to satellite dish restrictions.

Similarly, with Neulion, consumers don't need to be Dish subscribers to get the online TV packages. They only have to subscribe to a certain foreign-language package online. Neulion then ships a DISH-branded IP set-top box and handles billing and customer support. In this model, an AT&T or Comcast customer, for example, could add a Neulion package to their U-Verse or cable service without switching to become a Dish subscriber.

These two approaches combined allow Dish to avoid two oft-cited pitfalls of other TV Everywhere initiatives – the need to migrate TV programming to the PC and the limitation of customer choice. Dish doesn't require negotiating with content providers to bring customer subscriptions online, Dixon said. Consumers won't be restricted to a few shows from a few networks as in Comcast's Xfinity service, but will have access to all their TV programs and DVR content.

"Clearly, Dish has recognized that the Internet is its best friend in combating competition and winning back the hearts and eyes of a restless subscriber base," Dixon said. "As with all such innovations, however, the devil is in the interface. Can Dish deliver the "TV Everywhere" experience in an UI that subscribers can actually use? Unfortunately, the company's track record regarding UIs has not been good….That being said, the services employing Neulion and Sling functionality are clearly on the right track."